The chairman of the board of directors of the AEP, one of the 16 business associations convened by the Ministry of Economy for a series of meetings next week to assess “the impact and mitigation measures” of new tariffs, expressed significant concern over the substantial effect these will have on Portuguese companies.
“On one hand, directly, because the export of goods to the American market, our fourth largest client and the first non-European one, representing about 7% of the total value of Portuguese goods exports, will become more expensive,” explained Luís Miguel Ribeiro.
“On the other hand, the effects will also be felt indirectly, mainly due to the impact that the European Union, where we direct more than 70% of our exports, will suffer, which will reflect on the dynamics of external demand directed at the Portuguese economy,” he added.
The AEP anticipates that sectors facing “greater difficulty in coping” with the additional tariffs will be those with commercial relationships with the US, especially those heavily exposed to this market. These include several sectors with a high degree of productive specialization within the Portuguese economy such as food products, textiles, footwear, as well as products from the chemical, metalworking, and equipment industries.
“But,” emphasized Luís Miguel Ribeiro, “there will be much more, as we cannot ignore the indirect impacts.”
In this context, the association highlights the diversification of export markets as “essential to minimize risks,” noting its ongoing initiatives to assist companies in this process, particularly its Business on Way (BOW) internationalization support project.
More generally, the association’s leader cited Banco de Portugal’s estimate that a tariff shock could negatively impact the growth of Portugal’s Gross Domestic Product (GDP) by 0.9 percentage points this year, referring to it as “a very worrying sign given that the magnitude of this impact corresponds to about 40% of the projected economic growth for Portugal by 2025.”
Regarding the measures necessary to try to mitigate the impacts of the new tariffs imposed by the US, AEP reports it is conducting a survey among companies to gauge the economic impact of this measure.
Alongside presenting the results of this survey, at the meeting called for next week by the Ministry of Economy, the association intends to “reaffirm a set of measures” already presented to this Government, especially within the State Budget framework.
These measures are “aimed at improving the productivity and competitiveness of companies, particularly in stimulating reindustrialization, business resizing, and market diversification, without forgetting the reduction of excessive bureaucracy and regulation in the entire relationship between the public sector and companies.”
He emphasized that “these obstacles continue to severely penalize the normal development of business activities and are a clear hindrance to the robust and sustained growth of the Portuguese economy.”
The Ministry of Economy will hold meetings next week with 16 business associations from various sectors to assess “the impact and mitigation measures” of the tariffs announced by the US President, the executive announced on Thursday.
These meetings will occur from Wednesday to Friday, in Lisbon and Porto, with participation from representatives of the Agency for Investment and Foreign Trade of Portugal (AICEP), IAPMEI, Compete, the Directorate-General for Economic Activities (DGAE), and the Portuguese Development Bank (BPF).
The objective is to “open a dialogue channel with the sectors that will be most affected by the ‘reciprocal tariffs’ model,” particularly the automotive, fuel, rubber, electric, and electronic sectors, metallurgy, metalworking, wood and furniture, cork, footwear, leather, textile and clothing, home textiles and wool industries, along with the employer associations AIP, CIP, and AEP.
Donald Trump announced on Wednesday new US tariffs of 20% on products imported from the European Union, adding to the existing 25% on the automotive, steel, and aluminum sectors. The new tariffs were imposed on all imports, with surcharges for countries considered particularly hostile to trade.
